Blood money? You'll need to save more

Dear Dave,

I recently applied for life insurance for the first time with a child rider. The insurance company denied my request for the rider portion because my son has hemophilia. Do you have any suggestions or advice?

Sarah

Dear Sarah,

Unfortunately, you're going to have a difficult time with this situation. It's generally pretty hard, for obvious reasons, for hemophiliacs to get life insurance. I hope you understand that's a statistical statement, not a spiritual statement.

You can always cover him as a child by building an emergency fund over and above the three to six months of expenses I normally recommend. A child rider is just a small policy to cover final expenses and things like that, so you could self-insure by saving up in the event — God forbid — of a worst-case scenario. An average funeral today costs around $7,000 to $10,000. You could always spend less, but if you guys have reasonable safeguards this isn't a situation you should be facing. I mean, there are probably some things he just shouldn't do from a common sense standpoint, right? But lots of folks have long, wonderful lives with that particular condition.

It might be that as research on the disease progresses and as he gets older, there's a possibility that he could qualify. Think about this. If you even whispered a word like "cancer" anywhere near your name 25 years ago in the insurance business, you were done — no life insurance of any kind. Nowadays, they look at all the factors involved. You can actually have had cancer and get life insurance.  

In short, I think there's hope for the future. In the meantime, I would cover it with a slightly larger emergency fund. Just add a few thousand to what you would normally set aside for emergencies, because you might face some medical issues, as well.

-Dave

Dave Ramsey is America's trusted voice on money and business. He has authored five New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover,EntreLeadership and Smart Money Smart Kids. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.